Legal Blog

Nice Try

A 1988 mortgage was somewhat unusual; it provided for no payment of principal or interest until at least 1998. After that, the mortgagee could initiate an appraisal process and demand payment or the mortgagor could initiate a sale process. In 1998, the mortgagee obtained an appraisal and demanded payment; the mortgagor commenced an action alleging that the 10-year limitation period had passed and that the mortgagee had lost its right to the money.

This actually happened: see Saved by Technology Inc. v. Thomas [2004] O.J. No. 343 (S.C.J.).

The judge spent 15 paragraphs explaining what we would have thought was obvious. A limitation period does not start to run until the mortgagee has a cause of action. If there is no default, there is no cause of action.

The judge awarded the mortgagee summary judgment for possession of the mortgaged property.